Scalping No Longer Sketchy

New York is one of the few states where ticket scalping is perfectly legal, or at least was legal until this month. As the state that boasts Broadway, Madison Square Garden, and 30 Rockefeller Plaza, among countless other entertainment venues, New York is the perfect laboratory for this controversial approach to ticket sales.

For many years anti-scalping laws were considered necessary to protect consumers from spending exorbitant amounts of money on tickets. Over time, however, this paternalism faded, and the public consensus came to be that the government should not prohibit a person from spending $7,000 to see a basketball game, if that person is willing and able.

Box offices becoming relic of the past

In 2007, New York passed a law that eliminated price caps on the resale of tickets. Proponents of the law hoped that the law would lower ticket prices by bringing the black market into the public forum. Opponents, however, worried the law would drive up ticket prices by granting scalpers free reign.

This month, the law lapsed while the New York legislature debated a new and improved version of the law. The holdup in negotiations is Ticketmaster’s paperless ticketing technology. For certain events, Ticketmaster requires the original broker to show identification before entering. Where paperless ticketing is used, resales of Ticketmaster tickets are impossible except on Ticketmaster’s own exchanges.

The legislature has hesitated to vote on any bill until they have addressed paperless ticketing. New York Governor David Paterson has demanded that Ticketmaster give New Yorkers a paper ticketing option, but so far Ticketmaster has ignored his request.

Proponents of paperless ticketing argue that it provides more security for consumers and more control for artists and companies that use the paperless technology, like Ticketmaster. Other Ticketing companies respond that paperless ticketing hurts consumers because it makes resale virtually impossible.

Both sides of the debate have reasonable arguments for promoting consumerism. Until New York maintains its experimental pro-scalping law for a few years, however, it will not be clear just what the impact of such a law could be on ticket sales. Hopefully, New York will keep its scalping law, if only so that the country can see how this type of ticket-selling environment could impact the entertainment industry, for better or for worse.